FY2014 GAIR - Communication 5/2/13

The following is the General Administrative and Infrastructure Recharge (GAIR) information for FY2014.

FY14 GAR 5.54% and GIR .55%; total GAIR 6.09%

FY13 GAR 5.15% and GIR .39%; total GAIR 5.54%

The GAIR methodology was established decades ago using components of the formal federal
Facilities and Administrative (F&A, also known as ICR) calculation
methodology, in addition to actual expenditures incurred for common
infrastructure improvements. The GAR portion is calculated using the
federally defined general and administrative (G&A) cost pool divided by total campus operating expenditures per the annual
audited campus financial statements. G&A
expenditures are commonly found in the General Fund.
Examples include accounting, human
resources, budget office, a portion of OIT, and CU-system services (e.g.
purchasing, payroll, IT functions). GAIR proceeds come into the general fund and are used to cover these
general administrative costs.

The GIR portion is calculated by determining the auxiliary share of common infrastructure
costs and then dividing that amount by total auxiliary operating expenses
excluding GAIR expenses. Examples of common infrastructure costs include sidewalks, roads, garbage
cans, and bike racks.

GAIR is a cost recovery model.The GAIR rate is calculated annually using the most recent full fiscal
year actual expenses.For example,
the FY2014 GAIR rate is calculated during FY2013 using FY2012 actuals.
The FY2012 G& A pool grew 25%, while
total campus current fund operating expense grew 1.54%.IT related expenditures and the charge from System Administration for
its (central) services were the primary drivers for the G&A pool increase.The FY2012 campus operating expenditure growth was smaller than past
years due to the expiration of ARRA state appropriated and research funding.

The FY2014 GAIR
rate is calculated to be 6.63% (6.08% GAR; GIR 0.55%), an increase of 1.09%
from FY2013.Given the
significance of this increase and the lateness in the budget cycle, the campus
will postpone 50% of this calculated increase for one year (FY2014). This 50%
postponement will not be built into subsequent year rates.Since FY2015 GAIR rates are dependent on FY2013 actual activity, it is
uncertain what the GAIR rate will be and could be in the range of the FY2014
calculated rate.